Nigeria Pharma Industry was valued at USD 1.4 Million in 2016 and is expected grow at CAGR rate of 9% in the forecast year (2016-2026). The value of the Nigerian pharma market could rise by 9% a year over 10 years of duration to reach USD 3.6 Million by 2026 making it as large as the South African market. In five years, Nigeria’s strong economic growth open various opportunities in its pharmaceuticals market. Yet these opportunities proved harder than expected, with many multinationals struggling to find a remedy for success. To capture Nigeria’s potential; they need to take a long view, whether economic headwinds and should overcome structural obstacles. In urban areas, pocket spending accounts for the bulk of healthcare expenditure, growth in consumption should translate into higher healthcare spending. Over the forecast period Nigeria could contribute between USD 1.9 Billion to USD 2.2 Billion in pharma sales growth, where 55% comes from prescribed drugs.
Nigeria’s healthcare infrastructure varies significantly between urban and rural areas and between public and private provision. The overall country lacks the medical facilities, equipments, and capabilities it needs to tackle considerable it needs to tackle the considerable healthcare challenges. Because of the lack of infrastructure and facilities, an estimated of 5000 patients travel abroad every month for healthcare with majority of needing treatment in Cardiology, musculoskeletal, hematology or oncology.
The medical tourism of India and South Africa was valued at USD 1 Billion in 2013. Health care spending in Nigeria accounts for 70% of total health expenditure in 2015. The government’s contribution is an estimated at 25 percent little more than a third of 72% average for countries in the organization for Economic Co-operation and development. As a result, patients face a high out of pocket costs and affordability is an issue for all but the richer class households can able to cover the full cost of ethical drugs through their pocket spending or their private health insurance. Making matter worse, distribution, wholesale and retail markups can be very high; a drug’s manufacturing price can double or triple by the time it reaches patients.
Market Opportunities & Restraints
As the consumption shares increases, cities are becoming ever more important as sources of growth for market players. 45% of consumption is concentrated in top five Nigerian cities and their per capita spending in big cities can reach almost twice the national average. Cities are important for another reason also: their superior logistics, healthcare facilities, infrastructure make them an engine for structural changes in Nigeria’s health system. For commercial success, companies should target major cities and urban districts and will involve developing grassroots view of local potential using household purchasing power metric. For instance, 20 local government areas in Lagos, attractive areas could include Eti-Osa and Surulene which has the highest number of upper-class households with an annual income of around USD 70,000.
Drilling down into opportunities at the level of sales and marketing channels enables a company to make smart choices to aim the resources. An approach to specific products, channels, and healthcare providers can prove more effective. Companies also need a product portfolio that meet the contrastic needs of patients, who face a growing the burden of non-communicable diseases such as heart disease, respiratory diseases, and poorer patients who suffer from infectious diseases such as malaria, typhoid. Many healthcare players like Sun Pharma, Cipla, Candila Glenmark, etc. have tailored their entry-level marketing strategies. Some multinationals are overemphasizing the hospitals while underserving retailers which is representing more than 70 percent revenues in major fields like cardiovascular and musculoskeletal. To strike the right balance, healthcare companies need a detailed knowledge of the stakeholders and dynamics that shapes the private, public, and donor markets.
Comments
Log in or sign up to join the conversation.